THE FUTURE of British Rail's telecommunications arm is in doubt after its managing director resigned in protest at delays in transferring the business into the private sector.

Rail unions now fear for the jobs of up to 3,000 BR staff who would have been transferred into British Rail Telecommunications by early next year.

Peter Borer, the managing director of BRT, is believed to have clashed with Sir Bob Reid, BR's chairman, over the sell-off delays. Mr Borer will be leaving his post within the next few weeks.

BRT, which will have a turnover of around pounds 150m this year, wants to provide telecommunications services to companies other than British Rail but cannot obtain the necessary licence while still in state hands. The telecommunications arm has a 15,000-kilometre network which it believes is ripe for wider exploitation and already runs 65,000 telephone lines for BR.

There are growing fears among BRT staff that the telecommunications company will lose its existing business as British Rail itself is broken up under the Government's privatisation plans.

One source said that without a new licence, BRT would not be allowed under law to serve the successor companies to British Rail, which would then be expected to use BT or Mercury. To survive and become a national force, BRT must be sold before any other fragmentation of BR began, he said.

A spokesman for the National Union of Rail, Maritime and Transport Workers said: 'We are very concerned about job losses and about how any decisions (on the future of BRT) have been made.

'We have heard there may have been a change of policy at board level and have written to British Rail within the last few days for clarification,' he added. He said that unions had been told that BRT would have a five-year contract to provide communications services to BR and its successor companies but this might have changed now. 'The licensing issue is critical,' he said.

Mr Borer joined BRT from Kingston Communications, which runs the telephone service in the Hull area. He had been keen to help stage a management buyout of BRT and had been in talks with potential partners in the United States. Other senior executives at BRT are also thought to be disillusioned and preparing to leave.

British Rail confirmed Mr Borer's imminent departure but said: 'Peter Borer, who brought the company forward to its present position, has now substantially completed the task for which he joined BR.' British Rail said that Mr Borer expected to continue his career within the telecommunicatons industry, but a BRT source said that he had no firm job plans.